A general model of comprehension for narrative discourse is proposed wherein the comprehender constructs a memory representation of a story based upon (1) meaningful events (states or actions), and (2) causal relations between the events. From this representation, a causal chain, representing the important events in the narrative, is derived. Assuming that story coherence depends upon how locally cohesive or causally connected are the events in the story, a number of implications of the causal network and causal chain assumptions are tested against existing data on story comprehension and recall. One analysis completed on four stories used by Stein and Glenn (1979) on 10-year-old children shows that the model accounts for (1) recall of events across stories that differ in cohesion, (2) differential recall of events such as settings, initiating events, goals, etc., (3) immediate and delayed recall, (4) importance judgments, and (5) answers to Why questions. Support is requested to analyzed existing literature in order to test several implications of the causal analysis. In addition, experiments using conditional probability analysis, relatedness ratings, reconstruction, and priming procedures are proposed which test the network and causal chain assumptions of the model. Other studies on the use of systematic questioning to assess or to promote comprehension as well as to validate the causal analysis are proposed on children and adults. This research is aimed at discovering how causal knowledge, both of the psychological-social and physical worlds plays a role in understanding and remembering events and discourse. As such, it seeks to provide an account for a variety of findings over the past decade on story understanding. Further, it introduces a different analysis of meaning into the psychology of language and provides a method by which readability and coherence of narrative tests can be analyzed and quantified. The practical applications lie in the areas of text analysis, communication, writing, and comprehension.